Core Views - The opportunity cost of equity investment remains low, with a downward trend in interest rates since September last year, enhancing the attractiveness of stock investments compared to other asset classes [2][78]. - The real estate risks that began to unfold in 2021 have not yet fully stabilized, indicating that the adjustment in the national real estate market is still ongoing [2][11]. - China has a comparable gap with the US in the AI technology revolution, with advantages in application, potentially outperforming any other country in practical implementation [2][51]. - Chinese companies must transition to a phase where they gain more added value through branding and enhance the technological content of their products [2][66]. - The view on technology stocks is still cautious, described as a "game for the brave," emphasizing the need for risk awareness and contingency plans [2][90]. Economic Growth Model - China's past economic growth model is becoming ineffective, necessitating reforms, particularly the transition from an investment-driven government to a service-oriented government [4][19]. - The challenges in this transition include high levels of local government debt and the inefficiency of past investments, which have led to diminishing returns [21][23]. - The future direction of economic growth will likely rely more on consumption to drive growth, with a significant focus on the service sector to address employment issues [26][29]. Real Estate Sector - Since 1998, approximately 500 billion square meters of commercial housing stock has been accumulated, with a significant portion of household wealth tied up in real estate [11]. - The average national price of real estate is around 10,000 yuan per square meter, indicating that the wealth of households in real estate amounts to approximately 500 trillion yuan [11]. - The real estate market is still facing downward pressure, with sales volumes declining from a peak of 1.56 billion square meters in 2021 to over 800 million square meters in 2024 [38][39]. - The rental yield is a crucial factor in stabilizing real estate prices, with a target yield of around 2% being necessary for long-term stability [42][43]. Technology Sector - The technology sector has shown significant growth since 2018, particularly in the context of US-China decoupling, necessitating self-reliance in technology development [12][15]. - The biopharmaceutical sector has been a standout performer, with Chinese companies increasingly contributing to global drug development [48][49]. - Despite challenges, China's manufacturing sector remains robust, with a strong supply chain and cost advantages that are difficult for other countries to replicate [17][71]. Manufacturing Sector - Manufacturing is considered the foundation of China's economic strength, with historical examples showing that countries that neglect manufacturing tend to decline [16]. - The focus for Chinese manufacturers should shift towards increasing product value through R&D and branding, moving away from a volume-driven model [66]. - The impact of tariffs on manufacturing is manageable for many companies, with strategies in place to mitigate costs and maintain competitiveness [70]. Investment Strategy - The current investment strategy emphasizes maintaining a high allocation in equities, particularly in dividend-paying stocks and technology, while being cautious about market conditions [76][89]. - The portfolio is diversified, with approximately 40% in dividend assets, 30% in technology stocks, and over 20% in manufacturing [92][98]. - The focus on Hong Kong stocks is driven by their relative affordability and the broader range of investment opportunities available compared to the domestic market [83][84].